Many businesses or industries have regulated or contractual appeals or grievance process allowing a user or a customer the opportunity to challenge the denial of a service or benefit. These appeals or grievance processes uniformly suffer from lack of automation and standardization. Instead, the appeal or dispute is submitted in paper form and without the benefit of standardized nomenclature or data format.
One example is medical insurance coverage plans. State and federal laws, as well as contractual provisions, allow both those insured (consumers) and healthcare providers (doctors, dentists, chiropractors, etc.) the right to file appeals with health insurance companies when the health insurer has denied a request or benefit. A consumer appeal arises when a request for approval to receive medical treatment is denied or a claim is not paid correctly. A healthcare provider may file an appeal when an insurer has not properly paid for a particular service rendered. Upon receipt of a written appeal or grievance, an insurance plan must review the appeal and make a decision regarding its approval or denial.
Why Providers Appeal
In a typical denial of a request for medical services, a patient and a physician determine the need for a medical service and the physician contacts the healthcare insurer to request pre-authorization for that service. After the healthcare provider has treated the patient, a claim for payment of those services is submitted to the health care payer. The claim must be submitted on the appropriate claims submission form; for providers that is a HCFA 1500 Claim Form, and for facilities it is a UB92 Claim Form. Insurance companies require that a “clean” claim form be submitted. That means that the forms must include all of the following information:
Patient Identification
Patient Demographics (i.e., address)
Diagnosis
Dates of Service
Procedures or Services Provided Utilizing Standardized Codes and Descriptions (i.e., CPT codes)
“Units” of Service (i.e., how many times the patient was seen in the office) Billing Amount(s)
If the claim does not meet the specified criteria, it is denied or a partial payment may be made to the provider. The provider receives an explanation of payment (EOP) outlining what was paid on the claim or the reasons the claim was denied or only partially paid. A description of the provider's right to appeal may be included in the correspondence from the insurance company. While the patient does not usually receive notification that a doctor's request for payment for a medical service has been denied, she or he is often billed when the insurance company does not pay. Most of the time claims are denied because either information is missing from the claim form or the provider contract is loaded incorrectly into the insurance company database.
How Providers Appeal
A provider may appeal on behalf of the member. A provider may also appeal claim payment denial or payment reduction. If a provider is appealing on behalf of a member for a medical service request denial, the process is the same as a member appeal. Most often, though, an appeal by a provider is triggered by receipt of a confusing explanation of payment benefit, or EOP. An EOP is sent to the provider by the insurer explaining the payment(s) for submitted claims. The EOP is coded by the insurer's claims processing system and lists the reason(s) for the claims denial; unfortunately, the codes are not standardized and are often unclear.
Most providers are not aware of their right to file an appeal. Those that do will often initiate an appeal by contacting the health care payer Claims Department or Provider Services Department. Physicians have the right to appeal if and when:
The appeal is on behalf of the patient for any reason.
The plan has denied the patient coverage for a service based on medical necessity.
A medical service claim payment has been denied.
A medical service claim payment is partially denied and/or paid incorrectly.
Why Patients Appeal
Patients generally submit a health insurance appeal for one of two reasons: denial of a request for a medical service or a claims payment denial. Say that the patient and physician determine the need for a medical service. The physician contacts the health care payer to request pre-authorization for that service. The physician provides the plan with all necessary demographic and clinical information justifying the requested service. Upon receipt, the insurer initiates a prospective review (a pre-certification utilization review) to determine if the medical service request will be approved. The following questions are most often considered:
Is the patient a member of the Health insurer?
Is the requested service covered under the patient's benefit plan?
Is the patient within the benefit limitations?
Is the provider of the requested service within the plan's network?
Is the requested service medically necessary?
If the response to any of these inquiries is “no,” the medical services request is denied. The insurance company must send notification of the denial to the patient and the requesting provider and informs the member that she or he has the right to appeal the decision. The health insurer is required by law to outline the appeal process.
It is important to realize that one of the most common reasons a medical service request is denied is because the insurer concludes that the request is “not medically necessary,” which usually means that the physician and/or patient has not provided all of the important clinical information. This is critical, since all health insurers are required to utilize nationally recognized standards of clinical care and criteria to guide their clinical decision-making. A medical director, who must be a licensed physician, reviews all medical service request denials that are based on “medical necessity.” When a patient or provider appeal a medical service request denial and provides additional or missing information, about 80% of the time the denial is overturned and the request for service approved.
The majority of consumer healthcare appeals are triggered when patients receive a bill from their providers, who have not received reimbursement from the insurance company for services already provided. This is called a medical service claims payment denial. Providers are not legally allowed to bill members for more than the co-payment or deductible—a situation also known as balance billing—but often correspondence from a collection agency is the first notification for members that the insurance company has denied their physicians' service claim. Even if the insurance company eventually pays the claim, patients are still dunned because there is no communication between patients, providers (who have often sold their collectibles), insurance companies and, all too often, the collection agencies.
How Patients Appeal
A member initiates an appeal by contacting the health insurer. Healthcare insurers require written notification, even if the patient calls and speaks to a Member Services Representative. Some plans have a structured appeal form while others request a free-text letter. Regardless, by law all insurance companies must have in place a process for appeals, which requires a decision to an appeal within a time certain depending upon state regulation. The time for response begins to run when the insurer has received a “complete file.” The eAppealSolutions' eZappeal form was designed to capture all necessary information. Therefore, a “complete file” is submitted the first time.
The appeal determination is made and the member is notified of the decision. If the denial is overturned, the member is allowed to receive the requested service(s) and/or the provider is paid. If the appeal is upheld or affirmed, the member is notified of the procedures for a secondary review. The third and final level of appeal includes external reviewers.